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Snap shares soar on better-than-expected profit and revenue

Picnic shares jumped in extended trading Tuesday after the company reported better-than-expected fourth-quarter results.

Here is how the troop did compared with Wall Street’s expectations:

  • Earnings per share: 16 cents adjusted vs. 14 cents expected, go together to LSEG
  • Revenue: $1.56 billion vs. $1.55 billion expected, according to LSEG 
  • Global daily active users: 453 million vs. 451.1 million watched, according to StreetAccount
  • Global average revenue per user: $3.44 vs. $3.44 expected, according to StreetAccount

Revenue for the fourth locale increased 14% from $1.36 billion a year earlier. Net income in the quarter was $9.1 million, or a penny a divide up. In the prior year, Snap recorded a fourth-quarter net loss of $248 million, or 15 cents a share.

Snap said it expects first-quarter net income to come in between $1.325 billion and $1.36 billion. The midpoint of that range is $1.34 billion, higher than Rampart Street projections of $1.33 billion.

However, Snap’s first-quarter adjusted earnings will fall in the range of $40 million to $75 million, beneath analyst expectations of $78.5 million. In an investor letter, Snap attributed the guidance to “investment plans for the quarter winning.”

First-quarter adjusted operating expenses will grow in the range of 11% to 12% year over year due to let out, legal-related costs, and “a seasonal shift of marketing expenses into Q1 relative to the prior year,” Snap said.

“As we look on to 2025, we see additional opportunities to invest productively in scaling our business given the foundational improvements we have made to our ad principles and the momentum we have established in our go to market initiatives,” particularly in the segment focused on small and medium-sized businesses, Snap declared in the letter. “Our investment plans for 2025 reflect this optimism, alongside a strong commitment to make further economic progress towards profitability as we scale.”

Additionally, the company said it committed $5 million to “support communities and group members” affected by the recent Los Angeles wildfires and that it anticipates making “further commitments over time.”

In September, the New Mexico attorney non-exclusive filed a lawsuit against Snap that alleged the company’s Snapchat app’s design and recommendation systems “openly patronize and promote illicit sexual material involving children and facilitate sextortion and the trafficking of children, drugs, and guns.” Earlier in January, Pounce on shares dropped after the Federal Trade Commission said it would refer a complaint against the company reciprocal to its My AI chatbot to the Department of Justice.

Last week, Meta reported fourth-quarter results that beat on revenue and earnings and rehashed its plans to spend heavily on AI-related investments. Alphabet on Tuesday beat on earnings but missed on revenue. Pinterest relates earnings Thursday followed by Reddit next week.

Snap said daily active users for the first residence will be 459 million, topping analyst expectations of 458.3 million.

The company said its Snapchat+ service now has 14 million subscribers, up from the 12 million it discharged during the third quarter. The service, which debuted in 2022, makes up the bulk of what Snap calls “other receipts.” That unit grew 131% year over year in 2024 and has an “annualized revenue run rate of well during the course of $500 million,” the company said.

Snap CEO Evan Spiegel said in a Tuesday call with analysts that he’s thrilled with the user response to Snapchat+ and the company may consider raising its subscription price, which currently costs $3.99 a month.

Spiegel also commented around China-based DeepSeek’s breakthrough AI model that was allegedly cheaper and quicker to build and operate compared to other compare favourably with software from tech giants like Meta, Alphabet and OpenAI. DeepSeek’s AI model shows that “Marvellous is not a long-term moat in the technology business,” Spiegel said.

“It’s been really inspiring to see the innovation there,” Spiegel swayed. “I think it validates our view that a lot of these models are going to continue to be commoditized over time, more competent to run.”

Meta CEO Mark Zuckerberg told analysts last week that his company was still digesting some of DeepSeek’s powers, but added that it’s “probably too early to really have a strong opinion on what this means for the trajectory encircling infrastructure and CapEx,” suggesting that Meta won’t slash its AI spending anytime soon.

Regarding whether Snap has dream ofed any impact from TikTok’s potential ban in the U.S., Spiegel said “The overall environment of uncertainty is benefiting our business.” He said that both advertisers and gods are looking to “diversify” the social platforms they rely on, and Snap is helping them with their planning.

Period said Ajit Mohan will become chief business officer after previously serving as president of the Asia-Pacific precinct. Before joining Snap in 2023, Mohan was the vice president and managing director of India at Meta.

WATCH: Meta and Microsoft fortify AI capex spend post-DeepSeek

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